Higher Edge within a Single Candlestick

To me, "Market Constant" is the key ingredient for obtaining CONSISTENCY in our trading strategy. Anyone who has ruled out the use of lagging technical indicators and oscilators already (and perhaps unknowingly) understands this not-so-complicated theory. Markets are always organically changing every tick. New tick equates new element of information. How can you device a trading plan or a strategy when everything you see on chart changes its value after a new tick arrives? My simplistic interpretation is.....YOU HAVE TO BECOME THAT CONSTANT IN THE MARKET. YOUR STRATEGY HAS TO BASED ON THOSE CONSTANT PARAMETERS. My constants are simply dots in my spacial analysis to generate a signal. Its a just-in-time snapshot of a frozen element which remains unchanged forever after that snapshot is taken. Its the point of reference!
Just my simplistic mind tells me to do what is universal and neutral in ALL markets and across All market conditions. PipEasy has also covered this in the millipede thread.

EDIT : Just to add a bit more...the most important element of "TIME" for me is not for entries or setups but for Exits! I am of the camp that exits are more important than entries. The most important aspect of any trading strategy is to have a robust set of rules on when to exit as that is when you make $$$$. And knowing when you are right and when you are wrong is absolutely critical. That is the only reason why I incorporate timeframes in my strategy and why I track each trade based on which timeframe I entered.

A good point of view, another way that brings you to the same conclusion: time is not what we think.
However for the same reason I do not agree with your conclusion: time does affect everything in this dimension, but not in the way we think, because time is not absolute but relative; therefore it is not a constant.

you make easy things very complicated, trading is so simple, why do it the difficult way.

time is relative to speed and gravitation, but because we live all on earth so we have near all same speed and graviation. so time is not important for trading effect and goes same time for all on earth. 1 retail trader whould have more effect in trading then different time effects if you recalculate it. the only important thing is maybe time to get prices and fill orders, but thats a point of money and pipe and location.

[quote=Copernicus;10345717]{quote} Hi Gu-Night. :-) Nothing is certain.....but......IMO I genuinely think there is an impassable roadblock at the planck scale where we will only be ever able to mathematically project into this domain to attempt to understand it as we are classical observers immersed in a classical domain. A bit like a fish that is confined to the aquarium when a broader domain exists outside the aquarium.....or a 2 dimensional flatlander living in a 3D geometry. The main obstacle we need to overcome to be able to delve into this different domain and attempt to understand it is our cognitive biases brought about by our learning through indoctrination and through the way we are physically wired and have evolved in this world. It is not intelligence you are wrestling with here in understanding mathematical notions of QM....but it is the 'mind' roadblocks that stand in the way which do not allow us to confidently navigate this different system terrain........................

Your posts are amazing as always.
You got the point; a different mindset is needed to overcome this brain teaser, the solution lies beyond rationality and deterministic thinking.
We are facing with a field in which 2+2 does not always equals to 4; it may but it could equal to 8 or more, cause and effect does not occur one after the other but at the same instant in time, there is not a wrong side and a right side, there are no certainties: it is a field of infinite possibilities in which the observer is the main actor.
The observer (or a group of observers) is the one who determines which possibility is going to take place, in a probabilistic way.

How many times you have been told "trade what you see"?
This is one of those apparently no-sense statements I've been struggling with along my learning path at the begining.

I understand that time doesn't matter in trading since time (also in our 3D reality) is just an effect of movement through space. Thus, the conventional TFs are just arbitrary snapshots and the close prize doesn't really matter. However, maybe you may give some hints how to just look at the current prize (in relation to other prizes/reference points).

[quote=strongtrader;10346400] with "trade what you see" many have extrem wins. in technical analysis many trade best objects, what are easy to see very fast. long expereinced traders often simple look in chart and trade what they see, because they know exactly what there indicator would look like or price would do in next time with a good chance/risk.

so when you say this sentence is nonsence from you, because you lost from it, when other have big wins from it, then simple it dont suited you or you need to some years more to simple look in chart and see what happens with your trading system in this time. or your trading system is to complicated.

trading is simple as 2+2=4, so easy to earn money with it. why some like to try to earn with difficult ways money. you did talk to people "hold it simple", and same time you talk about maximum difficult unimportant parts of trading, that has no effect, thats then complete opposite to what you did tell before. KiSS is total different way.

As far as im currently aware time was used as a form of measurement for cycles created as a means of order/repetition/prediction going further back than BC times. However time itself is not linear -> ask any elder 'how fast this year went by' -> then ask a 6 year old the same (log?).

This nonlinearity can also be seen and is clearly expressed on all timeframes that exist.
If it was linear, then market movement would be perfectly symmetrical and prediction would be possible as price and time unify, however, bounces or breakouts (one or the other) would ceize to exist. Since time is not linear it adds additional complexity to an already complex system as it is inconsistent.

Deep rabbit hole this one, simply put:

"True time moves forward not with the tick of a clock but with the making of a choice. Until a choice is taken, the future is not determined" ~ Tom Montalk

and how do all those theories about time apply to trading in a concrete manner ??

Excellent stuff and this is what Soros calls reflexivity, which is a concept in the social sciences more generally.

The implication is that trading skill is related to social skills, in the sense of anticipating group behaviour. I recall somebody having done research on that but can't recall it at the moment.

Time,,,, no time ,wht is time etc etc ,,,,,,,,,,,,,mkt is rather much simpler than that ,,,,,,,aint time that makes it move it is buying and selling period nothing more nothing less ,,,,,,,,,, al these concepts of time ,,take a picture of your self every ten years and I guarantee you see the effects of time passing no matter how many frames per second,,,,,, per minute or how many different concepts you try and box it in

VEEFX you my friend have a solid understanding of what to look for and why. Simply find constant parameters that compliment each other and Market Edge is further refined every time. Keep it up nice work. I applaud all of you that are capable, or are atleast trying to understand what I am sharing in regards to Market Constants/Biases/Edges.

Dear user RondaRousey, whether you believe in Market Constants or not doesn't change the fact that they do exist, until you look at tick data and compare it's characteristics to random data you will have no idea what is being discussed here, I do not say this disrespectfully however what I am saying is honest, perhaps look at tick data's distribution vs. market data distribution (specifically the tails of their bell curves) that might a good idea, and then come back and post. Otherwise you'll just be disagreeing with whats being discussed without any logical reason as to why, simply because you do no understand what is being discussed.
Below I will share the Exact value in Pips of the MARKET BIAS caused by the Heavy Tailed Distribution that exists in the FX Markets for all Majors and numerous other products, before you say you don't believe in such a thing do the research yourself and get back to me.

Also, via the link below you will see NUMEROUS market constants that I have shared, you can disagree with them all you want, but that doesn't change their existence whatsoever. Lets hear you logic with disagreeing with the following which is an example of a Market Constant:
"There are 24 Hours in a Day one of those Hours will contain the High of the Day another Hour will most probably contain the low (this concept can be applied to any period(s) of time)"

MARKET CONSTANTS:
https://www.forexfactory.com/showthread.php?t=581678

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I will be touching a bit more upon Heavy Tailed Distribution today, I have received a few Private Messages asking about Heavy Tails and so I will explain their significance. I will be referring to Heavy Tailed Distribution as HTD from now on.

The probability of price moving in the same direction that it previously moved is always greater than it traveling the opposite direction (This is a Market Law). This phenomenon is not easily observable when using standard time frames, however it can be seen using tick Data. When look at tick data you will find, numerous movements of price UP in a row (the same applies for down ticks) so much so that this data cannot be called "Random."

Sometime ago I wanted to know if tick data could be traded, specifically EVERY SINGLE tick that prints in a NEW direction, example: Down, Down, Down, UP <(Buy on this UP tick because price will continue UP with greater likelihood than reverse)
I wanted to know what maximum possible cost one could pay per trade (slippage, commission, and spread) and make profit on average for every time a new tick would print (a tick in a new direction that is). The answer was an approximate 3 points (0.3pips) of cost per trade is the maximum allowable cost IF a trader were to trade EVERY single tick that prints in a new direction and remain profitable. This HTD phenomenon is a Constant, but also a market Bias (a Market edge), however by itself it is too small to trade and make a profit from once trading costs are factored in. Spread + Commission + Slippage are typically much higher than 0.3 pips. However, this HTD bias when combined with other biases and constants that increase profitability by even a fraction add up to create a system with consistent profitability.

So that HTD Bias is only good if the cost per trade is less than 0.3 pips, this is useless to the retail trader when used by itself, however for the upper echelon they can trade this bias regularly. The majority of trading done by advanced Funds today is High Frequency Trading. Technical analysis IMO is dead, to promote it is simply misleading oneself and others, if what I say offends anyone I do apologize however, what I stated is the truth IMO. Digging for deeper understanding of the markets, finding Biases that provide even a fraction of a pip of an edge per trade is the way to go, ultimately combine numerous Biases for increased profitability.

The more capital a person has to trade the easier it is to trade biases. Large volume traders receive volume discounts for trading, and these discounts provide more pips won per trade. As the accounts grow so do these discounts, along access to faster/advanced trading methods, ultimately making it easier to make profit trading. Every point and millisecond counts when trading. It is smart to do whatever you can to reduce the cost per trade (Slippage, Spread, and Commission), the cost per trade is a Market Bias in itself that works against the trader, it must be reduced to make profitable biases (such as HTD) possible to profit from.

"In the Manhattan lawsuit, exchange operators and Barclays were accused of giving high-frequency traders special access to exchange floors and enhanced data feeds, and letting them install computer servers near the exchanges’ own."
http://www.reuters.com/article/us-hi...0IO1O420141104


So getting back to HTD and time,
The above HTD phenomenon exists during every single moment of the trading Day. The only thing that changes the amount of HTD that is observable (and trade-able) is the PERIOD of TIME used by the observer. We touched on this with the example of Rain and HTD, just a recap: the 1 second time frame is more HTD than a 1 month time frame. (This is also a Market Law, how time directly effects the observable HTD)

So lets look into something new: the TIME of Day when a trade is being placed is irrelevant to the above HTD phenomenon, a trade could be opened now, 5 hours from now or, 3 years ago, this HTD phenomenon is a Constant (regardless of what people choose to believe or not believe). However, the TIME of Day still is extremely important, the cost per trade (slippage + spread) vary throughout the trading day. If one tried opening a trade during the early minutes of the New York open, slippage is virtually guaranteed, while trading during the end of the day (2:00PST, 0:00 MT4 time) trades are susceptible to high spreads.
So Time in a sense is irrelevant when it comes to Constants existing or not existing, however it is very important when it comes to placing trades.

So my friends and beloved community, I hope what I have shared over the past little while can be beneficial to those of you who are willing to put in the work required to develop consistently profitable trading methods.

User RondaRousey, before you disagree or criticize anyone else again that is positively contributing to this discussion, please share your research that backs up your claims in regards to market Constants NOT existing. IF you can disprove the 0.3 pips Market Bias (HTD Bias) that exists on all Major pairs I would be amazed (providing real research and not just your opinion), the same applies for the other Constant I mentioned:

"There are 24 Hours in a Day one of those Hours will contain the High of the Day another Hour will most probably contain the low (this concept can be applied to any period(s) of time)"

Also, via the below link you can find some more Constants that you can try and disprove if you are up for it.
MARKET CONSTANTS:
https://www.forexfactory.com/showthread.php?t=581678

I apologize RondaRousey, if I am coming across rude, however your previous posts have been based upon nothing factual just an opinion that you are using to criticize someone else's actual work, and real life FACTS. If you can prove anything you say using actual Data that would be beneficial to this discussion, as that is the reason we are discussing no? To develop and improve trading methods.
The concepts, and FACTS that are discussed here will go over the heads of many, this is to be expected, not everyone is capable of understanding these concepts, and some people just don't understand the significance of factual information. To those of you that are capable, or are trying to understand keep it up and you will someday look back and thank yourself for persevering.

Anyways to get things back on track,
I shared one Bias with you all including it's approximate pip value (HTD Bias across all Majors and most products ex. SP500) feel free to develop your own indicators/scripts to confirm/disprove what I stated and look at the actual probabilities for yourselves. If we took 100 individuals from this forum I doubt even 10 will do that much, so understand that the competition in this industry is fierce however most are either incapable, or unwilling to do the thinking/work that is required. So ultimately most of the competition gives up before the race has even commenced.

I also shared how Biases/Constants are not always evident (post #738). So keep your mind open and always try out new things, while keeping track of what is beneficial, and what isn't.

Keep track of everything just so that you don't use the same thing twice by mistake. As an example I've seen struggling traders going from support and resistance lines... to trend lines... to moving averages which are equally as inconsistent when it comes to profitability. Yet they will not look at the fundamental reasoning as to why such things are inconsistent. (I have debated/researched in the past the inconsistency of technical indicators such RSI, MA, Lines, etc. if you feel they are beneficial feel free to use them, I won't however be discussing why they are/aren't useful, feel free to look through my past posts as I have discussed this before.)

IMO Consistent characteristics of the market are needed when making a system that is consistently profitable.

Best of luck in finding other Biases. I have shared one Bias in detail (HTD), and discussed concepts of Time and it's direct influence on the HTD Bias, and various other key things.
I have found 3 Biases, and I am working on the 4th, and I do estimate that there are approximately 6. However in all honesty I am not intelligent enough to go about achieving 6 they are beyond my mental capabilities at this point in time.
I will be doing a bit of research for sometime now, I apologize for not being active or responding to PM's.

Lots of love as always, take it easy everyone
God bless!
Rparm

x

Absolutely correct

Nice backtest, much hard work. Possibly for scalping

Yep, human behavior is driven by the same matrix indeed: what happens is that you cannot anticipate the behavior of one single person but you can anticipate the behavior of a group of persons.

I guess you mean that you don't use a common indicator (like RSI, Stoch, etc.)?! Unless I am very much mistaken (and my calculation was correct), I assume that you use only the 8 majors (pairs with EUR, USD, JPY, CHF, GBP, AUD, NZD, CAD) in order to make your decision based on either the last tick of a candle/TF bar in comparison to its previous tick or the last tick of the last candle. Although it sounds like you calculate some currency strength I don't think that this is your way of trading. Maybe it's more likely that you compare the current outcome with a distribution (sorry if this is cryptical, but I don't want to state my interpretation clear in the case that this is the way you do it ...). Does this imply that the last tick of a candle has more importance than any other tick?

It's possible to look at a single tf chart with multiple tf reference, it's all in the settings.

You said it :-) You need to really immerse yourself in this brain teaser to make sense of it. Time certainly does have a strong role to play as it is the glue that holds together a complex system and allows for cause and effect from the perspective of a single vantage residing within that system when things within that system move. In other words time measures change and that change is unique to each reference frame.

In the words of a philosopher....'time is something that stops everything happening at once' :-)

Putting it simply, the passage of time is purely relativistic. The time that an individual reference frame experiences is constant but when comparing times between different reference points with synchronized clocks, time is not equal, but what it allows for is to connect the complete causative path (sequence of events) that gives rise to that single reference point existing or being 'real'.

If time were not relativistic, then this universe would not be causal in nature. In a complex system with a 1 to many relationship (just like a database) the shared events between participants need to be coordinated recognizing that the complete set of antecedent causal events cannot be identical. This results in relativism when cross-comparing reference frames. Each of us will think we are holding the most accurate clock...when in fact all of us are....and in fact the passage of time when compared against each other is different. This is one of the many non-linear puzzles that the universe throws at us to solve. Time is the glue or an accounting device to coordinate events of a complex system. An emergent condition is a necessary prerequisite for a future emergent condition. To allow for the spatio-temporal separation between participants (or different perspectives), time must be relative.....Hasta La Vista Newton and your fixed spacetime arena :-)

In special relativity under inertial conditions (non-accelerating), everything moves through spacetime (as a 4 dimensional construct) at the same constant velocity of c....however under a distinct 3D (space) and 1T (time) geometry this motion is converted by vectors into motion through space and motion through time. For massless particles like photons, no motion occurs through time and all motion occurs through space...hence the finite constant of c for any massless particle and a clock held in the photons reference frame would never age. For particles with mass, some of their motion is directed towards space and the balance of their motion through time...hence massive particles must travel at less than c and time on clocks held in their reference frames change. The Lorentz transformation allows us to switch between reference frames to exactly deduce how the passage of time differs between reference frames. Under general relativity in gravitational fields or under local acceleration this general principle holds but you have to sequentially rotate the transform over time. This equates to spacetime curvature. This is the difference between special relativity (a special condition of mechanics under inertial motion) and general relativity.....and more general motion of any type of condition which therefore includes acceleration.

What you find is that in a 'classical' universe where the properties of time and space are emergent properties, cause and effect matters and events play out in a coordinated progressive way (as distinct from a quantum universe where time is absent, cause and effect are absent and everything does happen). For example Feynman was able to deduce using the path integral formulation that quantum theory allows for an infinite array of trajectories to be taken for a quantum object in moving between two points in spacetime whereas in a classical system, a single object can only take a single unique trajectory through spacetime.

While you may be head scratching about now.....don't worry about it but just note that time as a distinct dimension in itself is relative, just as the 3 dimensions of space are. It is only when we unite space and time into spacetime that we can unify all different perspectives taken....now the hard part is that you now need to undo what I have said and recognise that spacetime actually doesn't have a separate 'reality' and is just a way to measure the where and when of events taking place in a system. You can't touch space just as you can't touch time. They are simply mapping tools we use to ascribe coordinates to events in a relational system.....so now back to events and cause and effect.

For example if I hold my own personal clock and take note on that clock of all precedent causes that are required for my existence in that moment, the time that has elapsed over the course of unfolding events will be different to the time that has elapsed with respect to another point in spacetime. This is known as the 'relativity of simultaneity'. If I attempt to measure the time of some other observers clock in comparison to mine, I will always get different results. This is because the entire set of precedent causes required for existence at that spatially separated point in space time is different and takes different pathways.

Viewed another way, in terms of a complex 'classical' system where you are attempting to understand why you exist as an emergent feature, you need to fully encompass all the causative factors arising in that system that have given rise to your existence.....from the creation of our sun right through to the creation of your parents and why you are living today. You say that the sun is not important, but in terms of your existence and your ability to experience the now, it is critical. When thinking of complex systems you need to divorce yourself from the "I" and think of the bigger picture and how you have arisen from it. All these factors are emergent qualities arising from different levels of order emerging from chaos or disorder.

If you appreciate this then you will understand why time travel back into the past is intractable. To achieve this you need to restructure the universal state to exactly the conditions of the past. You cannot simply isolate yourself in a time machine and travel backwards to a prior date. You need to fully transform the entire casual hubble volume surrounding you to conditions of that prior state to have any notion of that same past. That is what time is. It is not the ticking seconds on a clock. It is the track record of emergent conditions required for you to exist and be pondering that question now. It is the entire sequence of causative pathways....or the tree of information associated with the universe's history seen from your vantage.

The difference in time comparison becomes more extreme between reference points that get more spatially separated....and ultimately become disconnected when all methods of causal connection between one frame of reference and another are lost. This is where we have a causal disconnection between reference frames and where spatial separation is so vast that there is no common set of causative factors that allow for a common reference between the two vantages. Time comparison then makes no sense at all between causally disconnected regions. The reason it makes sense to observers sharing common patches of their reference frame with others is the commonalities that exist in the causative pathways of each region of spacetime.

So rather than viewing time in a simplistic sense as simply a coordinate system for measuring the passage of events from the perspective of a single reference frame....you then start to realise that if I could step outside my vantage and look down on every vantage possible in that complex system, then you would be able to view 'all of time'. This is the viewpoint taken from the perspective of relativism which builds on the principle of the 'block universe'. In a totally encapsulated causal universe that is not embedded in a wider system, 'all of time' is said to actually exist. What differs is simply the different perspectives taken from the different vantages, or the different ways you slice the spacetime block, which is a very necessary outcome for time if you want a consistent universe that displays cause and effect from each distinctive reference frame.

If you apply this to the markets which are a nested financial system sitting within a wider universe, you quickly realise that the financial markets are not purely self contained systems like our universe is. For example the participants of the markets that include the humans or their creations (algo's) draw on wider causative factors for their existence than the financial markets themselves. The complexity of the financial markets comprises the causative factors in the financial markets PLUS the causative factors arising in the wider system. This just makes the puzzle of interpreting them even more complex. It's the same when you look into the processes found in a living cell and recognise that their are distinct processes attributable to the cellular environment and additional processes attributable to the wider system within which the cell operates in. It is just processes within processes ad infinitum wherever you look. Fortunately the universe provides a maximum limit to this riddle of the Matryoshka doll in that it is self-contained and is 'all there is'....unless you subscribe to the multiverse....but then you just broaden the definition of universe to contain this plurality of systems.

The best we can hope for in a nested complex subsystem are partial or 'pseudo' ephemeral features (or which Rparm refers to as constraints) that are not enduring like for example the value of c in a vacuum etc., but nevertheless have a role to play in creating emergent features that we can capitalise on.

Fortunately there is a physical principle that we can use to trade these markets. That principle arises from a feature of complex systems where order is seen to emerge from chaos. You won't see this at the lower timescales, but you will see this feature emerge at the higher timeframes. The principle is found in random systems in which a slight bias exists. That bias is magnified by the principle of signal amplification of random systems whereby collective or co-ordinated participation actually leads to an amplified signal to noise ratio or in other words a more enduring ephemeral feature or emergent artefact.

As you say S.....we can never anticipate the actions of a single participant as they possess a unique reference frame. The single reference frame can themselves express certainty, but we cannot deduce this with exactitude from our distinct reference frame. The best we can only ever do is apply a probability to it as we do not share the exact same causal pathways..... but we can anticipate the actions of a collective with greater precision that possess causative commonalities. This principle is found in statistical mechanics whereby emergent features such as superconductivity (or condensed matter physics) are simply a property arising from a statistical ensemble of Particles and actually is not a fundamental property of a single particle itself. Order arises in chaos from collective behaviors of the ingredients (or participants) which lead to emergent features in complexity. The sharing of causative pathways that allows for coordinated collective behaviour demands that we invoke 'more time' to allow it to play out.

Spot on RR :-)

VEEFX,

Could you please share your insights on my doubt:

The market is not supposed to be random and You mentioned the following

"It's pretty shocking to see SR and SR flips happening not because of traders trading SRs but because of the underlying sequence of market structures happening at different dimensions or levels or whatever fancy words you want to label it."

As you can see/analyze the structure clearly and is such a strong trading edge. Once you start trading really huge quantities, you would be making money off some X,Y,Z participants.

After some time would your edge start decaying. I mean, since you are discovered a well hidden secret, would the underlying sequence of market structures change?
[or]

Do the underlying sequence of market structure held in place no matter what like by some principle. {Ex: Energy can neither be created nor destroyed...}


Looking forward to your inputs...

Thanks